IRS to hire private tax-collection firms
- By FederalSoup Staff
- Sep 26, 2016
The Internal Revenue Service announced Sept. 26 that it will hire four private agencies to begin collecting certain overdue federal tax debts starting next spring.
The private tax-collection program was authorized by Congress last December when a provision requiring the IRS to outsource tax collection was included in a highway bill to offset the cost of the legislation.
“These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working their accounts,” the agency said in an announcement. “Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases. The IRS will give each taxpayer and their representative written notice that their account is being transferred to a private collection agency. The agency will then send a second, separate letter to the taxpayer and their representative confirming this transfer.”
IRS said employees of the private collection agencies must comply with the Fair Debt Collection Practices Act and “be courteous and respect taxpayer rights.”
The National Treasury Employees Union immediately blasted the plan, saying IRS instead should retrain thousands of its own employees who are scheduled to be laid off, rather than outsource the tax-collection work to “unaccountable private companies.” The union said two previous attempts to use private collectors failed.
According to NTEU, more than 7,000 IRS employees are slated to lose their jobs at sites that process paper tax returns — 1,800 in Covington, Ky./Cincinnati, Ohio, in 2019; 3,000 in Fresno, Calif., in 2021; and 2,400 in Austin, Texas, in 2024.
“Many of these workers have been loyal employees of the IRS for decades but only some of them will get other jobs within the agency,” said NTEU National President Tony Reardon. “The smart and humane thing to do would be to retrain the remaining workers to collect delinquent taxes rather than outsourcing IRS jobs. There’s absolutely no need for Congress to outsource this important work to the most complained about industry in America when there’s more than enough in-house talent available.”
Amid an increase of scams by fraudsters impersonating IRS tax collectors, IRS said it “will do everything it can to help taxpayers avoid confusion.”